Fortunately, SVG and VML don't limit you to just vector graphics. You can render, transform and scale raster graphics within the vector graphics space. The graphic is just like a textured polygon that you can move around.
Consider how 3D engines work, where they compute all the visible surfaces using vectors, and then transform and scale raster "textures" to apply on these surfaces.
The XML issue isn't actually relevant either because normally the SVG/VML DOM objects will be generated at runtime by JavaScript, rather than serialized in the page and served up statically.
SVG is by no means a solid game development platform, but it is some interesting browser-based technology which might be useful for game developers to investigate.
Pretty smooth demo :). I see what you mean now, but i was going on the assumption that in a turn based game he wouldn't need to do much transformation, hence, my suggestion to just use pngs and allow the browser to redraw them.
Consider how 3D engines work, where they compute all the visible surfaces using vectors, and then transform and scale raster "textures" to apply on these surfaces.
The XML issue isn't actually relevant either because normally the SVG/VML DOM objects will be generated at runtime by JavaScript, rather than serialized in the page and served up statically.